Microsoft Adds Content to Zune Marketplace

When you talk about, even think about, digital content stores, Apple’s (AAPL) iTunes is the natural selection. It’s the dominant, mainstream store in the market. Amazon’s (AMZN) MP3 and video store pops up as second mention, Amazon being synonymous with retail. Microsoft (MSFT) is hoping to change that, or at least join the party.

The “Xbox Live” environment for gamers has been growing steadily. Microsoft has put money into original content and licensing. Still, that’s a nice market. In October, they went more mainstream and began selling videos in their Zune Marketplace. The offerings at the time, however, were limited. Now, the Zune Marketplace is expanding a little more.

Starting Tuesday, Microsoft will begin offering TV content including programming from Viacom’s Comedy Central (Microsoft signed a significant ad and promotional deal with Comedy Central parent, Viacom (VIA.B), earlier this year).

The Zune Marketplace will also provide a home for NBC Universal TV programming too. New episodes of popular shows like “The Office” had been removed from iTunes after Apple refused to incorporate flexible pricing. In the Zune Market, that won’t be a problem. Microsoft accepted the prospect of price flexibility as part of the license agreement.

Though the Zune has some interesting features as a media player – its ability to wirelessly sync with PCs in particularly, it’s hard to count on these moves to strengthen the Zune Marketplace having a substantial impact on the product’s sales rate.

Since 2006, Microsoft has sold only about 2million Zunes. While that’s respectable, it pales next to iPod sales that range upwards of 10million a quarter. The availability of a few more titles in a digital store isn’t going to shift that in a measurable way.

Comments

[F. J. Taylor]

What's a Zune...? OH, you mean Microsoft's "iPod killer" - the one that nobody buys or listens to...

Seriously, NO amount of "content" can save that dog - and NBC is foolish for moving that direction. 2 million since 06 is "respectable"? In whose calculations?

Zune is an irrelevance, and MS is increasingly becoming one as well.
Invest in them if you want to - after all, it's your money, and you can waste it as you wish. I would rather use mine to start a fire - that way at least you'd get some good from it!

[K. Lewis]

It was interesting to see the Zune commercials during the NBA playoffs touting a $14.99 subscription service. As an iPod/iPhone user, I just don't have such an option. If nothing else, moves like this do influence the decisions Apple makes because they represent a valid competitive move. MS shouldn't be counted out of a sector until they willingly leave. That much cash can feed a "loser" until it grows to maturity. (see XBOX)